| Date: | 03/22/2001 |
|---|---|
| Organization: | Massachusetts Supreme Judicial Court |
After the Committee on Judicial Ethics issued this opinion, the Massachusetts Supreme Judicial Court adopted a revised Code of Judicial Conduct. Because this opinion was rendered under a prior version of the Code, a judge should not rely on it without contacting the Committee on Judicial Ethics.
You are a member of the board of directors of a health care organization (organization). The organization is a "component" of a parent company (parent). The parent is apparently a holding company for separate entities engaged in delivery of health-care services of various kinds and descriptions. Your letter does not describe the precise relationship between the parent and the organization.
The organization owns and operates many health care providers. The parent owns certain entities that provide outpatient and residential programs, including detoxification and counseling, for persons addicted to drugs or alcohol. In addition, one of those entities is an agency providing programs for individuals convicted of OUI for the first time. The parent also has contractual arrangements with several specialized medical groups that provide medical care at its component institutions.
You have been associated with the organization and the parent for a number of years. You began as a trustee of the parent, a position you held for about two years during which you served on the Professional Improvement Committee. At some point, the parent changed its form of governance and you became a director. You became an organization director approximately four years ago and have served in that capacity continuously ever since. You do not receive any compensation for your service on the organization's board. Indeed, none of the board members receives compensation for his or her board service.
In your request, you have asked whether you may sit as a judge on matters involving the organization. While you have not identified any particular matter or type of matter that lies at the heart of your request, you have indicated that you are primarily concerned about matters arising under G. L. c. 123, a statute dealing with voluntary and involuntary commitment of individuals to mental health facilities. Overall, however, your letter raises three separate but related areas that require at least brief discussion. The first concerns your continued service as a member of the board, the second concerns the circumstances under which your service as a director will unqualifiedly require your recusal, and the third concerns other applications of the Canons.
Continue Service as a Director
Canon 5(B), entitled "Civic and Charitable Activities," provides that
"[a] judge may participate in civic and charitable activities that do not reflect adversely upon his impartiality or interfere with the performance of his judicial duties. A judge may serve as an officer, director [or] trustee . . . of [a] . . . charitable . . . organization not conducted for the economic or political advantage of its members, subject to the following limitations:
(1) A judge should not serve if it is likely that the organization will be engaged in proceedings that would ordinarily come before him [or her] or will be regularly engaged in adversary proceedings in any court."
Complete understanding of the meaning of that provision is aided by considering the following portions of Canon 5(C)(2):
"[a] judge may hold and manage investments, including real estate, and engage in other remunerative activity permitted by Canon 4, but should not serve as an officer, director, manager, adviser, or employee of any business."
The Committee starts with those two portions of Canon 5 because, although you did not raise the question directly in your letter, your description of the organization raises several issues regarding whether you can continue to serve as a member of the Board of Directors of that organization at all.
To begin with, your letter at least suggests that the organization, or a component thereof, may appear before you in some capacity with some regularity. That possibility, in turn, raises the question whether seriatim recusals would obviate the problems those appearances present. In CJE Opinion 91-3, the Committee was faced with the question regarding whether a judge could serve on a "Community Advisory Committee" of a non-profit hospital. There, too, the judge noted that the hospital was likely to appear before her from time to time. Against that backdrop, the Committee made the following observation:
"If such appearances in your court are very infrequent, you may serve and simply recuse yourself were the matter to be assigned to you. However, if such appearances were more than sporadic, recusal would not suffice and your membership on the Committee would be prohibited. Thus, it will be necessary that you regularly review the activities of the Hospital in your court to determine if you may properly continue to serve on the Committee."
Your involvement with the organization is far greater than was the involvement of the judge involved in Opinion 91-3. Accordingly, what the Committee said there applies, a fortiori, to you.
Secondly, although you have not described in any substantial detail the organization's structure, composition, budget, or extent of operations, you should be aware that there sometimes is a fine line between the "educational, religious, charitable, fraternal, or civic organization" with which Canon 5(B) permits judicial involvement and a "business" from which judicial service as an officer or director is barred by Canon 5(C)(2). The sometimes imprecise dividing line was explored extensively in CJE Opinion 98-7. While your letter does not provide the Committee with a basis for determining whether or not the organization is a "business," we invite your attention to Opinion 98-7 for such guidance and assistance in making your own decision in that regard as that Opinion may provide.
Unqualified Obligation to Recuse
If the cited provisions of Canon 5 are inapplicable, several other Canons come into play. First of all, Canon 3(C), entitled "Disqualification," provides, in part, that
"(1) A judge should disqualify himself [or herself] from any proceeding in which his [or her] impartiality might reasonably be questioned, including but not limited to instances where:
(d) he or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:
(i) is a party to the proceeding, or an officer, director, or trustee of a party . . . ."
The recusal provisions of Canon 3(C)(1)(d)(i) are unqualified. Accordingly, if the organization, or a division thereof, is a party to a proceeding, you may not act as the judge in that proceeding as long as you serve as a director. Because the Committee does not know the precise relationship between the organization and the parent, it is unable to render an opinion on Canon 3(C)(1)(d)(i)'s application to cases in which the parent, or an affiliate thereof, is a party but the organization is not.
Qualified Obligation to Recuse
Even if the mandatory recusal provisions just quoted are inapplicable, several other Canons require consideration before one may conclude that you may serve as a judge in a proceeding involving the organization. First among those is Canon 3(C)(1)(c) which says that
"(1) A judge should disqualify himself [or herself] from any proceeding in which his [or her] impartiality might reasonably be questioned, including but not limited to instances where:
(c) he [or she] knows that he [or she], individually or as a fiduciary, . . . has a . . . property interest in the subject matter in controversy . . . which interest could be substantially affected by the outcome of the proceedings."
Unlike Canon 3(C)(1)(d)(i), Canon 3(C)(1)(c) is accompanied by an "escape clause." Canon 3(D), entitled "Remittal of Disqualification," provides as follows:
"A judge disqualified by the terms of Canon 3(C)(1)(c) . . . may, instead of withdrawing from the proceeding, disclose on the record the basis of his disqualification. If, based on such disclosure, the lawyers, after consultation with their clients independently of the judge's participation, agree in writing that the judge's relationship is immaterial or that his [or her] financial interest is insubstantial, the judge is no longer disqualified, and may participate in the proceeding. The agreement, signed by all lawyers, shall be incorporated in the record of the proceeding."
Broadly speaking, two different circumstances are likely to trigger the Canons just cited. First is the appearance of the organization, or a member institution, as a party to a proceeding before you. The second involves proceedings in which, although the organization or a member institution is not a formal party, the organization either is closely involved in the proceeding or stands to benefit financially or otherwise from the proceeding's outcome.
If the organization is a party, the provisions of Canon 3(C)(1)(c) and 3(C)(1)(d) overlap. Structurally, the more restrictive provisions of Canon 3(C)(1)(d) are intended to apply when the entity in question is a party to an action before the judge. Therefore, when the two provisions overlap, the Committee is of the opinion that Canon 3(C)(1)(d) controls and unqualifiedly requires recusal.
When the organization is not a party but is closely involved in the proceeding or stands to benefit financially or otherwise from the proceeding's outcome, slightly different considerations arise. The Committee is of the opinion that in such situations, your status as a director means that you "as a fiduciary . . . [have] a . . . property interest . . . in the subject matter in controversy" within the meaning of Canon 3(C)(1)(c). If that "property interest" "could be substantially affected by the outcome of the proceeding," then Canon 3(C)(1)(c) requires your recusal. With respect to such proceedings, however, the Committee is of the opinion that full compliance with Canon 3(D) provides a mechanism for avoiding the recusal Canon 3(C)(1)(c) otherwise requires.
Having said that, you should be aware that full compliance with Canon 3(D)'s mandate may be far more difficult than an initial reading of Canon 3(D) may suggest. Almost universally, the phrase "consultation with their clients independently of the judge's participation" appearing in Canon 3(D) has been interpreted to require a consultation free from coercion, express or implied.
Coercion free consultations are difficult to achieve. In CJE Opinion 92-6, for example, the Committee said this on the subject:
"The United States Judicial Conference in 1971 adopted a resolution, applicable to Federal judges, stating that judges should reach their own decisions with respect to recusal without calling on counsel to consent because a consent request was 'fraught with potential coercive elements which make this practice undesirable.' (Resolution L.) Thereafter Canon 3D was removed from the United States Code of Conduct for Judges. On the other hand, it has not been removed from Rule 3:09, and is therefore still available for use in appropriate cases. Judges should, however, be alert to the potentiality that coercion might be perceived by counsel who constantly appear before the judge."
The Committee forcefully returned to that theme in CJE Opinion 96-3 where it said as follows:
"To [the] undesirable aspect of seeking the litigants' consent must be added the fact that the problem in this case is not particular to an isolated case but is situational, affecting all cases in which the office of the District Attorney . . . makes an appearance. Faced with other defendants consenting to have you preside at their trials, defendants and their counsel who are hesitant to do so may feel special coercive pressure to agree. In 92-1, where the father-son relationship created a problem in some but not all of the cases handled by that District Attorney's office, we concluded, with reservations, that remittal of disqualification could be a permissible alternative. Here, in contrast, the universality of the problem, and the strong public interest in the appearance of strict impartiality in criminal cases lead us to conclude that remittal of disqualification is not an appropriate alternative in your situation."
The Committee is of the opinion that a consultation free from express, implied or even reasonably perceived coercion is essential before Canon 3(D) will provide a safe harbor from the recusal requirements Canon 3 elsewhere contains. You, therefore, should employ the provisions of Canon 3(D), if at all, with deliberate and careful circumspection.
Finally, the information you have given the Committee about the relationship between the parent and the organization and your relationship to the parent simply does not provide the Committee with a sufficient basis for determining the extent to which Canon 3(C)(1)(c) applies to proceedings in which the parent either is a party or is otherwise involved. Unfortunately, therefore, the Committee cannot give you any advice regarding matters in which the parent or an affiliated entity is involved, directly or peripherally, but the organization is not.
